Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Equity Capital Markets

<ul>
<li>A lot has been said and written about Trial's IPO but much of this relates to pass performance and comparing it to supermarkets.</li>
<li>As the company's latest Trial Go store in Fukuoka shows,  Trial is a tech-based retailer and a true discounter, and discounting is where the growth is in Japanese FMCG.</li>
<li>Trial thinks its technology can reduce costs significantly, improving margins while allowing it to roll out more small format stores to compete with convenience stores. It may be right.</li>
</ul>


A lot has been said and written about Trial's IPO but much of this relates to pass performance and comparing it to supermarkets.
As the company's latest Trial Go store in Fukuoka shows,  Trial is a tech-based retailer and a true discounter, and discounting is where the growth is in Japanese FMCG.
Trial thinks its technology can reduce costs significantly, improving margins while allowing it to roll out more small format stores to compete with convenience stores. It may be right.


Trial IPO to Drive Tech Innovation Targeting Convenience Stores

Equity Bottom-Up

<ul>
<li>As outlined in previous reports, Aeon has been working hard to streamline its vast retail empire but also rethinking the fundamentals of retailing for each major format it operates.</li>
<li>The results are now coming through with a big increase in operating profits in 1H2023, up 23% on last year.</li>
<li>There is real momentum now, and the new online supermarket business is central to its ambitions to create the first true national FMCG business.</li>
</ul>


As outlined in previous reports, Aeon has been working hard to streamline its vast retail empire but also rethinking the fundamentals of retailing for each major format it operates.
The results are now coming through with a big increase in operating profits in 1H2023, up 23% on last year.
There is real momentum now, and the new online supermarket business is central to its ambitions to create the first true national FMCG business.


Aeon Keeps Working After High Profit Growth

<ul>
<li>The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.</li>
<li>The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.</li>
<li>As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.</li>
</ul>


The Matsumotokiyoshi and Cocokara Fine merger is now complete following almost two years of dealing, planning and company bonding.
The combined business creates the single biggest drugstore group in Japan, although the Tokyo-based partners have lost ground in the past year while others have grown strongly.
As a result, the lead is smaller than they previously expected – and will likely get smaller still. The good news is that profits should soar.


Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

In the previous article, "Japan's Governance: Founder Family Ownership / Case of Drugstore Industry," I examined the negative correlation between the diversification of the founder family's ownership and the decline in the percentage of ownership in value creation indicators such as ROE, ROA, and Tobin's Q. The drugstore industry was chosen as a case study. The reason for choosing the drugstore industry as a case study is that more than 20 years have passed since the companys' inception in the 1990s, and many major drugstore chains are now at a point where the founders are stepping down from the management line and handing over management to their successors. This is because the competition in the industry is becoming more intensified as the founders' shareholdings become more diversified, and management decisions are becoming more critical for the survival of the industry as it approaches the stage of deciding who will win. In this article, I would like to focus on one company in the industry whose founder is at the front line of management, Genky DrugStores (9267). I will focus on Genky DrugStores (9267) because of its unique management strategy.

In the previous article, "Japan's Governance: Founder Family Ownership / Case of Drugstore Industry," I examined the negative correlation between the diversification of the founder family's ownership and the decline in the percentage of ownership in value creation indicators such as ROE, ROA, and Tobin's Q. The drugstore industry was chosen as a case study. The reason for choosing the drugstore industry as a case study is that more than 20 years have passed since the companys' inception in the 1990s, and many major drugstore chains are now at a point where the founders are stepping down from the management line and handing over management to their successors. This is because the competition in the industry is becoming more intensified as the founders' shareholdings become more diversified, and management decisions are becoming more critical for the survival of the industry as it approaches the stage of deciding who will win. In this article, I would like to focus on one company in the industry whose founder is at the front line of management, Genky DrugStores (9267). I will focus on Genky DrugStores (9267) because of its unique management strategy.

Japan's Governance: Founder Family Ownership / Case of Drugstore Industry (2)

The merger of <a href="https://www.smartkarma.com/entities/matsumotokiyoshi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2259:1" rel="noopener">Matsumotokiyoshi Holdings Co., Ltd. (3088 JP)</a> and <a href="https://www.smartkarma.com/entities/cocokara-fine-inc" target="_blank" data-smartkarma-citation="entities:15447:1" rel="noopener">Cocokara Fine (3098 JP)</a> is just one symptom of the growing concentration of market share in the drugstore sector.But the sector's leaders are no longer just battling for dominance in drugstore retailing; increasingly drugstores are evolving far behind this niche sector.Drugstore retailing is growing faster than any sector other than e-commerce because drugstores are positioned to meet customer needs for well-being, health and, nowadays, a broad range of daily necessities including food, and so becoming ever more integrated into consumers’ daily shopping experience.Their eclectic ranges also mean they perform well in the middle of natural disasters and crises of various forms and many chains have seen good results thanks to earthquakes, extreme weather and especially thanks to Covid, but this doesn’t fully explain the sector’s success.Crises may have helped, but Japan’s top drugstores are today some of the country’s best retailers in their own right.The following is a complete, in-depth review of the drugstore sector, including rankings, KPIs, and future trends on the sector and the potential winners.Jun Tsuruha, the current <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> CEO, was widely quoted last year as saying the sector would soon be dominated by just “four or five” major firms. This is far from fantasy, with Tsuruha, <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings (3141 JP)</a>, Matsukiyo-Cocokara, <a href="https://www.smartkarma.com/entities/cosmos-pharmaceutical-corp" target="_blank" data-smartkarma-citation="entities:3797:1" rel="noopener">Cosmos Pharmaceutical (3349 JP)</a> and <a href="https://www.smartkarma.com/entities/sugi-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:9255:1" rel="noopener">Sugi Holdings (7649 JP)</a> the most likely contenders.

The merger of Matsumotokiyoshi Holdings Co., Ltd. (3088 JP) and Cocokara Fine (3098 JP) is just one symptom of the growing concentration of market share in the drugstore sector.But the sector's leaders are no longer just battling for dominance in drugstore retailing; increasingly drugstores are evolving far behind this niche sector.Drugstore retailing is growing faster than any sector other than e-commerce because drugstores are positioned to meet customer needs for well-being, health and, nowadays, a broad range of daily necessities including food, and so becoming ever more integrated into consumers’ daily shopping experience.Their eclectic ranges also mean they perform well in the middle of natural disasters and crises of various forms and many chains have seen good results thanks to earthquakes, extreme weather and especially thanks to Covid, but this doesn’t fully explain the sector’s success.Crises may have helped, but Japan’s top drugstores are today some of the country’s best retailers in their own right.The following is a complete, in-depth review of the drugstore sector, including rankings, KPIs, and future trends on the sector and the potential winners.Jun Tsuruha, the current Tsuruha Holdings (3391 JP) CEO, was widely quoted last year as saying the sector would soon be dominated by just “four or five” major firms. This is far from fantasy, with Tsuruha, Welcia Holdings (3141 JP), Matsukiyo-Cocokara, Cosmos Pharmaceutical (3349 JP) and Sugi Holdings (7649 JP) the most likely contenders.

Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

Japan

Genky DrugStores Co., Ltd. operates drug stores. The Company sells prescription drugs and medications. Genky DrugStores provides its services in Japan.

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Genky DrugStores Co Ltd (9267 JP)

Trial IPO to Drive Tech Innovation Targeting Convenience Stores

Trial failed to complete an IPO and is now going again and the same fundamentals outlined in this insight apply today as it is a long-term viewpoint.

Michael Causton

Aeon Keeps Working After High Profit Growth

Aeon's efforts to revamp its retail empire and rethink strategies are paying off, with a 23% rise in OP in 1H2023. A new online store is key to...

Michael Causton

Matsukiyo Cocokara: Together at Last

MatsukiyoCocokara may top the drugstore ranking post-merger but Welcia and Tsuruha have grown much faster and may take the lead again soon given...

Michael Causton

Japan's Governance: Founder Family Ownership / Case of Drugstore Industry (2)

I would like to focus on one company in the industry whose founder is at the front line of management, Genky DrugStores (9267) because of its...

Metrical Inc

Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

The Japanese drugstore sector has seen a big merger but there will be more as the sector not only consolidates down to a few leaders but also...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Trial IPO to Drive Tech Innovation Targeting Convenience Stores

Trial failed to complete an IPO and is now going again and the same fundamentals outlined in this insight apply today as it is a long-term viewpoint.

Michael Causton

Aeon Keeps Working After High Profit Growth

​Aeon's efforts to revamp its retail empire and rethink strategies are paying off, with a 23% rise in OP in 1H2023. A new online store is key to...

Michael Causton

Matsukiyo Cocokara: Together at Last

MatsukiyoCocokara may top the drugstore ranking post-merger but Welcia and Tsuruha have grown much faster and may take the lead again soon given...

Michael Causton

Japan's Governance: Founder Family Ownership / Case of Drugstore Industry (2)

I would like to focus on one company in the industry whose founder is at the front line of management, Genky DrugStores (9267) because of its...

Metrical Inc

Japan Drugstores: Growing Leadership in Food, Household, Cosmetics – and the Odd Medicine Too

The Japanese drugstore sector has seen a big merger but there will be more as the sector not only consolidates down to a few leaders but also...

Michael Causton

Aeon's efforts to revamp its retail empire and rethink strategies are paying off, with a 23% rise in OP in 1H2023. A new online store is key to...